Life insurance is unique among types of insurance for many reasons, but one stands out. Most types of insurance are set up to help you prepare for something that might never happen, like getting in a car accident or a tree falling on your house. Life insurance, on the other hand, helps you to prepare for something that will happen no matter what. After all, as the saying goes, only two things in life are certain– death and taxes.
Life insurance is set up to provide peace of mind for both you and your family and loved ones, giving you the solace of knowing that any expenses that might occur after your death will be taken care of. However, because life insurance is different from other types of insurance and because it can be a bit of a morbid subject, many people don’t know how to actually navigate life insurance. What are the reasons you might get a life insurance policy? Are you ever too old or too young for it to make sense to get one? You might be surprised at the answers to these questions. Since September is Life Insurance Awareness month, let’s go through the basics of life insurance!
What is Life Insurance?
When you have a life insurance policy, your insurance company agrees to pay a specific amount of money to any people or parties that you choose after your death, provided that your premiums are paid and up to date. The amount of money that is paid out is called the death benefit, and the people that you decide will receive the death benefit are called beneficiaries.
Common Reasons to Get It
There are some fairly obvious reasons to get a life insurance policy for yourself, like supporting your family, but there are other reasons as well that can apply to people who don’t have spouses, children, or other family members to name as their beneficiaries. Here are a few of them.
Support Family and Dependents
This is probably the most common reason to get life insurance. If there’s anyone in your life who depends on you and your income, such as a spouse, children, or any other dependents, setting up a life insurance policy ensures that they are taken care of financially just in case something happens to you.
Cover End of Life Expenses
Dying is a lot more expensive than you might think. Between medical bills, outstanding debts, and funeral costs, there can be a lot of expenses that pile up in the wake of your passing that your loved ones will have to deal with. Setting up a life insurance policy can be a great way to mitigate those costs and give them one less thing to worry about in a time of grief.
Make Posthumous Donations
If you have an organization or cause that is very near and dear to your heart, it is possible to leave a legacy by making a posthumous donation with your life insurance policy. Maybe there’s a charity you really want to support, or maybe you want to give back to a beloved alma mater. If you don’t have anyone else to be the beneficiary of your life insurance policy or you already know that your loved ones won’t have any troubles financially after your death, this can be a great option to leave a positive mark on the world!
Am I Too Young?
As a young person, there are so many things you have to juggle that life insurance is often the last thing on your mind, but your younger years are often a very smart time to set up a policy. When insurance companies are deciding how much your life insurance premiums will be, they take many different factors into account to try to determine your life expectancy, and age and health are two of the major ones. Setting a policy while you’re young and healthy can save you money on an insurance policy that you might end up wanting or needing in the future!
Am I Too Old?
Many people at a later stage in their life assume they might be too old to qualify for life insurance, but that’s not the case at all! It’s not uncommon for people in their 80s or 90s to set up a policy, so don’t write off the possibility based on age. Your health will play into your eligibility and premiums, but even with a past health crisis you can still get a good life insurance policy.
As you can see, pretty much everyone, no matter their age or situation, can get some benefit out of life insurance. If you’re interested in learning more, contact YMI here with your questions. We’ll be happy to help you!
